UK/Euro Financial Market Daily Morning Briefing 07-03-2007

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London shares lower, ex divs weigh, Michael Grade fails to lift ITV gloom

Leading shares remained lower in early deals as a plethora of stocks going ex dividend weighed on the index, and ITV fell after new boss Michael Grade predicted further falls in advertising revenues as it posted uninspiring full year numbers, dealers said.
   
At 9.00 am, the FTSE 100 was off 15.4 points at 6,125.5 but off an earlier low of 6,106.1, with ex dividends accounting for over 29 points. The broader indices were mixed.
   
Last night on Wall Street, the Dow rose 157.18, or 1.30 pct, to 12,207.59, after dropping 581 points over the past week. The Standard & Poor's 500 index was up 21.29 at 1,395.41 in its biggest advance since July.
   
The Nasdaq composite index rose 44.46 to 2,385.14 -- its best one-day advance since Oct. 4.
   
Over in Asia, Hong Kong's Hang Seng index closed its morning session up 141.39 points at 19,199.95, while in Tokyo the Nikkei 225 closed down 79.88 points at 16,764.62 after Japan's broadest index of future economic activity signalled for a third month that growth may slow.
   
Markets were also helped by comments from US Treasury Secretary Henry Paulson who said that Asia's two biggest economies remain sound despite the market rout of late, as he prepared to head to China to press for politically sensitive reforms.
   
He also calmed the US sub-prime lending sector by saying that the recent turmoil will not impact brokers and banks.
   
In London this morning, with Standard Chartered, Diageo, Persimmon, Rio Tinto, Royal Bank of Scotland, BAT, Barclays, Aviva and Lloyds TSB all trading without the right to a dividend, the index was prevented from reflecting the gains witnessed on other exchanges overnight.
   
In earnings news, ITV slipped 1-1/2 pence to 109-1/2 after new executive chairman Michael Grade revealed total ad revenues were likely to fall by 4.5 pct in the first quarter, compared to the 0.5 pct rise predicted for the UK TV market as a whole.
   
And the company warned its flagship ITV1 channel would likely suffer further net advertising revenue (NAR) falls this year following a 12 pct plunge in 2006.
   
To reflect its tepid prospects this year, ITV said it would not increase its 2006 final dividend from the 1.8 pence it paid for the previous year.

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In response, UBS reiterated its 'reduce' rating on the group and said EBITA of 375 mln stg was in line with consensus estimates but slightly below its forecast of 382 mln.
   
Also weaker this morning, Man Group slid 17.5 to 512 after saying last night that the net asset value of Man AHL Diversified Futures Ltd at the close of business on March 5 was 27.42 usd, down 8.23 pct from last week and up 6.6 pct over the last 12 months.
   
The AHL fund has about 1 bln usd under management, but its performance is seen as a barometer on its entire range of AHL funds.
   
On the upside however, Kelda rose 14 pence to 896 and peer Severn Trent ticked up 17 to 1,392 after Merrill Lynch upped its stance on the water utilities to 'buy'.
   
The broker said both groups offer "attractive" entry levels after the recent market correction.
   
Elsewhere, Kazakhmys rose 12 to 1,092 after Morgan Stanley initiated coverage in the copper miner with an 'overweight' rating.
   
As it was Resolution topped the index after the specialist life insurance group said chief executive Paul Thompson will step down from his position with immediate effect and named financial director Mike Biggs as his replacement.
  
It confirmed it remains in talks regarding acquisitions, business combinations, or a possible offer for the company.
   
On the second rung, Johnston Press rose 18 to 434 after posting solid full year results.
   
The newspaper publisher said it expects the UK advertising market to stabilise in 2007 following almost two years in the doldrums.
   
The owner of the Yorkshire Post and the Scotsman titles said that while its  advertising revenues fell in the early weeks of this year, the rate of decline  was slower than in the same period last year.
   
In response, Panmure Gordon upgraded its stance to 'hold' from 'sell', noting the numbers came in bang in-line with its estimates, while the outlook looks "upbeat", with revenue growth seen flat versus expectations of minus 3-5 pct.

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Elsewhere, construction group Carillion rallied 10-1/2 pence to 379-1/2 after reporting a 48 pct increase in pretax profit and revenue up 57 pct for the full year to December 2006, on the back of a strong public-private partnerships market and the successful integration of Mowlem.

Also outperforming this morning among the mid caps, Melrose took on 6-3/4 to 192-3/4 after saying full-year pretax profit before one-time items more than doubled on higher revenues, and added that its outlook for 2007 is "encouraging".
   
And door step lender Provident Financial ticked up 21 to 761 after posting solid results with Altium Securities upgrading to 'hold' from 'sell' with a target of 750 pence.

UK Diary of Events

For a diary of key UK financial and corporate events today, click here

US Summary

For a summary of US stocks at yesterday's close of trade, click here

1 point spread FTSE 100 Rolling Daily. PowerBet the Markets - Click here

PARIS - Market data at 9.54 am:

Major indices:
   
CAC-40 up 6.91 points or 0.13 pct at 5,444.04
SBF-80 up 51.14 points or 0.76 pct at 6,743.73
SBF-120 up 8.90 points or 0.22 pct at 3,988.68

Volume: 969 mln eur
23 CAC-40 stocks up
16 CAC-40 stocks down
1 CAC-40 stock unchanged

Major gainers:
   
Carrefour, up 1.78 eur or 3.30 pct at 55.68, after Groupe Arnault and Colony Capital said they have taken a 9.8 pct stake in the company.
   
Casino Guichard-Perrachon, up 2.12 eur or 3.24 pct at 67.49 as peer food retailer Carrefour came into play with the Arnault/Colony move. 
   
Accor, up 1.20 eur or 1.78 pct at 68.70, after full-year results exceeded expectations and it projected further growth.

Major losers:
   
Vallourec, down 9.49 eur or 5.04 pct at 178.74
   
Axa, down 0-.24 eur or 0.76 pct at 31.16
   
LVMH, down 0.46 eur or 0.56 pct at 82.26

Most active stocks:
   
Carrefour, 228 mln eur
   
Vallourec, 171 mln eur
   
Total, 54 mln eur, up 0.10 eur or 0.20 pct at 49.52

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AMSTERDAM - Market data at 10.13 am
   
Major indices
   
AEX                479.19, up 1.03 points
AMX Midcap         684.27, up 4.36 points
government bonds   lower

Major gainers:

USG People climbed 4.44 pct at 30.10 eur on the midcap after it presented  solid earnings. Other staffing stocks rose on the back of USG People's positive trading momentum; Vedior rose 2.10 pct at 16.53, while Randstad also advanced 2.29 pct to 53.94 eur.

Ahold gained 1.61 pct at 7.57

ABN Amro rose 0.30 pct at 26.86 and appeared unaffected by reports that a second British hedge fund is questioning strategy and calling for a split up.

Royal Dutch Shell climbed 0.12 pct at 24.49, in line with rising oil prices.

Hunter Douglas advanced 2.68 pct at 61.20 eur after presenting positive full-year results and a cautious outlook.

Major losers

Numico fell 1.29 pct at 38.20 with one trader citing an excessive share price as the reason, triggering profit-taking.

Unilever dropped 0.47 pct at 19.26 eur

TomTom declined 0.26 pct at 30.80 eur

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German shares AFX at a glance outlook

Forthcoming Events
  
Today
   
Adidas FY results, press and analysts conference
   
EON FY results
   
Axel Springer annual news conference
   
German Jan manufacturing orders
   
Feb crude steel production (0700)

Tomorrow
   
Salzgitter FY results
   
Lufthansa annual results news conference
   
Hochtief press talk with CEO Lueetkestratkoetter
   
German Jan industrial output

Company News
   
Adidas sees 2007 adjusted revenues up in mid-single-digit pct range
   
Adidas sees 2007 earnings up nearly 15 pct
   
Adidas FY div 0.42 eur/shr vs 0.33 eur
   
Adidas FY sales 10.084 bln eur vs 6.636 bln; consensus 10.05 bln
   
Adidas FY opg 881 mln eur vs 707 mln; consensus 900 mln
   
Adidas FY net 483 mln eur vs 383 mln; consensus 488 mln
   
Adidas Q4 opg 52 mln eur mln eur vs 35 mln; consensus 71 mln

Market News
   
Merck KGGA upgraded to 'add' vs 'hold' at Dresdner Kleinwort
  
SGL Carbon downgraded to 'hold' from 'buy' at Deutsche Bank

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